For more than a century, Wall Street has proven it's a bona fide wealth-creating machine. With thousands of publicly traded companies and exchange-traded funds to choose from, there's a good chance one or more securities can help you reach your financial goals.
But not all investment strategies are created equally on Wall Street. According to a comprehensive report from analysts at Hartford Funds, buying and holding high-quality dividend stocks can give long-term investors an edge.
In "The Power of Dividends: Past, Present, and Future," analysts at Hartford Funds, in collaboration with Ned Davis Research, compared the performance and relative volatility of dividend stocks to non-payers over 51 years (1973-2024). Not only did income stocks more than double the average annual return of non-payers (9.2% vs. 4.31%), but they did so while being considerably less volatile than the benchmark S&P 500 and non-payers.
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Ideally, income seekers want the highest payout possible with the least amount of risk. But uncovering ultra-high-yield dividend stocks -- those with yields four or more times greater than that of the S&P 500 -- requires a lot of extra vetting. While some high-octane dividend stocks aren't worth the trouble, a small group of vetted companies are capable of providing steady supercharged income.
If you want to generate $300 in super-safe dividend income in 2026, simply invest $2,670, split equally three ways, in the following three ultra-high-yield stocks that are generating an average yield of 11.25%!
AGNC Investment: 13.28% yield
The first dividend stock capable of producing mouthwatering, sustainable income in 2026 (and likely well beyond), with an initial investment of $2,670 split among three securities, is mortgage real estate investment trust (REIT) AGNC Investment (AGNC 1.49%). AGNC parses out its dividend each month and is yielding a hearty 13.3%, as of this writing on Dec. 26.
Although mortgage REIT portfolios are often complex, their primary objective is to borrow at lower short-term rates and purchase assets, such as mortgage-backed securities (MBSs), which offer higher long-term yields. This means that AGNC and its peers are highly sensitive to changes in monetary policy.
NASDAQ: AGNC
Key Data Points
Historically, mortgage REITs have performed best when the Federal Reserve undertakes a rate-easing cycle. When interest rates are falling, short-term borrowing costs typically decline for mortgage REITs. As long as the nation's central bank telegraphs its monetary policy actions well in advance, companies like AGNC have the opportunity to purchase MBSs with advantageous yields and can expand their net interest margin (i.e., the average yield on owned assets minus the average borrowing rate).
Furthermore, it's not uncommon for the respective book values of mortgage REITs to increase when interest rates are declining. This is noteworthy given that the shares of AGNC and its peers typically trade in close proximity to their book value.
Another factor that makes AGNC's dividend super safe is the composition of its nearly $91 billion investment portfolio. As of Sept. 30, just $0.7 billion was tied to credit risk transfer and non-agency securities, compared to $90.1 billion in various agency MBSs and to-be-announced securities. The federal government backs an "agency" asset in the event of default. While this added protection reduces the yield that AGNC Investment generates on the MBSs it buys, it also allows the company to prudently deploy leverage, thereby enhancing its profit potential and sustaining a premium yield.
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Pfizer: 6.87% yield
A second ultra-high-yield stock that's consistently delivered a top-notch dividend and can continue to do so in the new year is pharmaceutical titan Pfizer (PFE 0.99%). Pfizer entered the last week of 2025 sporting a yield that's nearing 7%.
The reason Pfizer stock is near its lowest level in 13 years is that it's being punished for its own success. In 2022, the company recorded more than $56 billion in combined COVID-19 therapy sales from its vaccine (Comirnaty) and oral drug (Paxlovid). However, sales for COVID-19 therapies have rapidly declined, leading to poor investor sentiment.
However, it's critical for investors to recognize just how far Pfizer has come over the last five years. After reporting $41.9 billion in full-year sales in 2020, the company recently updated its full-year sales guidance for 2025 to $62 billion. This represents 48% revenue growth in five years, with contributions coming from its COVID-19 drugs, as well as organic growth in other areas of focus. While Pfizer's stock has been punished, its novel drug portfolio has only grown stronger.
NYSE: PFE
Key Data Points
Pfizer's December 2023 acquisition of cancer drug developer Seagen is also bearing fruit. Through the first nine months of 2025, its oncology segment has delivered 7% operating growth, excluding currency changes, which reflects strong pricing power and growing demand for its cancer therapies.
Lastly, Pfizer's cost synergies underscore the current affordability of this rock-solid drug developer. The latest update from management points to an estimated $7.2 billion in net cost savings by the end of 2026. Improving the company's operating efficiency should lead to higher margins, which would make its forward price-to-earnings (P/E) ratio of 8 exceptionally cheap.
PennantPark Floating Rate Capital: 13.61% yield
The third ultra-high-yield stock that can help you generate $300 in super-safe dividend income in 2026 with an initial investment of $2,670 (spread equally three ways) is business development company (BDC) PennantPark Floating Rate Capital (PFLT +0.31%). Similar to AGNC Investment, PennantPark pays its dividend monthly and produces a supercharged yield of 13.6%!
A BDC is a type of business that invests in the equity (common and preferred stock) and debt of unproven small companies, traditionally known as "middle-market companies." Despite holding nearly $241 million in various common and preferred stock, the lion's share of its $2.77 billion investment portfolio is in debt securities.
NYSE: PFLT
Key Data Points
The reason PennantPark Floating Rate Capital chooses to focus on loans is simple: yield. Most middle-market companies lack access to basic financial services. Therefore, the financing PennantPark can provide comes with an above-average yield. As of the end of fiscal 2025 (Sept. 30, 2025), it was netting a weighted-average yield on debt investments of 10.2%.
What's intriguing about PennantPark's loan portfolio is that roughly 99% of it is comprised of variable-rate investments. Although a rate-easing environment will reduce the yields PennantPark is generating, the nation's central bank is slow-stepping its cuts. This is allowing the company to continue generating a double-digit yield.
Furthermore, management has done an excellent job of diversifying the portfolio (with an average investment size of just $16.9 million) and protecting the company's invested principal. Over 99% of the loan portfolio is in first-lien secured debt. Holders of this type of debt are first in line for repayment in the event of a borrower's default.
With PennantPark trading at a substantial discount to its book value, now looks like the perfect time for income seekers to pounce.
